Does an Agistment give rise to a Security Interest?

Kemp Strang Lawyers - Patrick Dwyer

Type: Article
Knowledge level: Advanced

Farm Table says:

Little tough to understand, however may be important if not entering into an agreement whereby you are not responsible for looking after your agisted stock when on another property.

An agistment agreement can have two forms:

  1. Bailment: Normally an agistment is a bailment. A bailment is simply where one person (the bailor) gives possession of goods, such as stock, to another person (the bailee), and the bailor has the right to receive the goods back. When the agistment is a bailment, the stock owner does not have a right to occupy the land and is not responsible for looking after the stock.
  2. License or lease of land: This will be the case when the stock owner has the right to enter the land and to look after the stock.

The article outline the relevant legal implications of each under the Personal Properties Securities Act 2009 (Cth).

  • If within class of regulated bailments -> the interest of the stock owner will be a security interest under the PPSA.

If it is a security interest, the stock owner may want to register the interest under the agistment on the Personal Property Securities Register (the PPSR), to preserve the priority of the owner’s interest in the stock.


Agistment will give rise to a PPSA security interest where:

  • it is a bailment (rather than a lease or licence);
  • the bailment is for a term of more than one year or an indefinite term;
  • the bailor (the owner of the stock) is regularly engaged in the business of bailing goods (such as stock); and
  • the bailee (the owner of the land) provides value for the bailment.

Refer to the article  for more information.

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